Eight key metrics for email marketing

One of the strengths of email marketing is its trackability. There are so many metrics you can track, in fact, that it becomes a bit daunting. Online marketing consultant Dave Chaffey has outlined what he considers eight critical metrics for email marketing.

1) Deliverability, or receipt rate. To determine this, subtract the number of emails that bounced from the number of emails sent, then divide that sum by the number of emails sent. Soft bounces—messages not delivered because of a technical issue on the intended recipient’s end, such as a full inbox—usually account for 1-2 percent of a given email list. Hard bounces, due to invalid addresses and the like—should not exceed 5 percent. If they do, you need to clean up your list.

2) Open rate, aka viewer rate or reader rate. This is the number of emails opened divided by the number of emails delivered. As Chaffey writes in the SmartFocus white paper “Effective E-marketing: Evaluating Email Marketing”, “There are a number of issues clouding the validity of open rates as a measure: for example, ‘opens’ can only be measured for HTML emails; if recipients use their preview pane in Outlook, this will be counted as an ‘open’ (but may have been deleted and never read); if graphics are ‘switched off’ the open will not have been counted (as it relies on delivery of an ‘invisible’ image).” Even so, an open rate of less than 10 percent, he says, suggests a weak subject line, an unknown or confusing “from” address, or poor timing for the mailing.

3) Click-through rate. Click-through rates can be determined in several ways: by dividing the number of clicked links by the number of people who’d opened the message, which Chaffey says is best for gauging the effectiveness of the creative and the offer; or by dividing the number of clicked links by the number of emails received or by the number of emails sent, which are better for measuring the overall success of a campaign. Also, “since you may have multiple links in the email and users may click links more than once, using total clicks for calculating click-through rates may be misleading,” Chaffey writes. “So the best approach for overall evaluation of a campaign is to use unique clicks which determine clicks from unique visitors to the microsite.” A click-through rate of less than 5-10 percent, says Chaffey, suggests a weak offer or creative. Something as simple as moving the call to action higher up in the email could increase click-throughs.

4) Form conversion rate. This metric indicates the percentage of email recipients who clicked through to a landing page and proceeded to complete an online form such as a registration page or a white-paper or catalogue request. To obtain this rate, divide the number of completed forms by the number of click-throughs. You should aim for a rate of at least 40 percent. If the form isn’t the focus of your landing page, if the form is too complex, or if the site provides no compelling reason for the visitor to complete the form, then your form conversion rate will probably fall short.

5) Overall campaign response rate. This is simply the number of people who performed the act you were encouraging—a sale, a white-paper request, a site registration—divided by the total number of email recipients.

6) Unsubscribe rate. To determine this figure, divide the number of unsubscribes by the number of recipients. Although you should aim for an unsubscribe rate in the low single digits, the actual percentage is usually less important than how the metric compares against the unsubscribe rates of previous email campaigns. If a particular email spurs a spike in unsubscribes, there was probably a problem with the content of that message.

7) Referral rate. This enables you to gauge the effectiveness of the viral elements of your email campaign, such as a “send to a friend” link. To calculate this, divide the number of referrals by the number of email recipients.

8) Return on investment. Total your fixed costs (email creative, landing page creative, set-up cost for sending the email) and your variable costs (list rental, cost per email sent, response management costs) and subtract them from the total sales generated by the campaign, and there you have it: your profit.

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